Let’s not forget Itec in the Nexperia affair

Now that the contours of the Nexperia affair are coming into focus, commentators are asking whether the Dutch government’s intervention was too heavy-handed. Minister of Economic Affairs Vincent Karremans justified the move by pointing to the chipmaker’s “crucial role” in Europe’s semiconductor ecosystem and its “significant economic security interest.” Yet, Beijing’s fierce – if predictable – retaliation has left parts of Nexperia’s production lines stalled, threatening not only the company’s stability but also Europe’s already fragile chip supply chain.

The affair once again illustrates how, since the pandemic, no one takes even the humblest chip for granted anymore. We’ve learned how a shortage of something smaller than a fingernail can paralyze the global car industry. It’s little wonder, then, that both Brussels and Washington have grown uneasy about China’s rapid ascent in this unglamorous but essential segment of the semiconductor market. Companies like Nexperia have become assets to be protected – sometimes zealously so. But in the rush to ‘save’ Nexperia for the West, something more subtle and potentially more vital risks being overlooked.